Step 1 Identify a product line that has a range of options at different prices.
An product line means that one company will sell related products using a single brand name. Good examples include hair care products, automobiles, iPods, smartphones, laptops, and the like.
Select a product line that offers different products, such as basic, intermediate and "expert" versions, at different price points. Your selected product line should have at least three products in the line but no more than six products.
As an example, the 2015 Ford Taurus is a product line with four products -- the SE, SEL, Limited, and SHO. Each of these four products has a manufacturer's suggested retail price:
- SE: $24,688
- SEL: $26,906
- Limited: $31,394
- SHO: $40,220
Source: Tom Wood Dealer Inventory, Indianapolis Indiana. Obtained MSRP excluding destination, options & incentives on October 23, 2015 at https://www.inventory.ford.com (Links to an external site.) .
(Because the Taurus has been provided as an example, choose another product line for your memo. If you have an interest in Ford automobiles, then simply choose a different model that otherwise meets the requirements.)
Step 2 Summarize the product line's pricing in a table.
Create a table which describes the current product line, including the features & benefits of each product, as well as the manufacturer's suggested retail price (MSRP). For product features, focus on features which distinguish the products in the line, rather than features which the product line shares.
Use this template for your table, or a close facsimile.
Step 3 Prepare a 1-2 page memo for the Chief Marketing Officer (CMO).
After creating your table, put yourself in the role of a newly hired marketer at the manufacturer. Imagine that one of your first tasks is to review the product line pricing and to recommend a change to the pricing strategy.
Include the following in your memo:
Product Line Review.
- Are there gaps or redundancies in the product line? Describe the presence (or, absence) of gaps or redundancies.
- What are the risks and benefits of making a change to the existing product line?
Pricing Review.
- Is the current pricing sound for this product line? Why or why not?
- Provide sufficient elaboration & justification so that your analysis is clear to anyone who might read your memo.
Recommendation.
- Should the product line pricing be changed? Why?
- What might the company gain and lose by your recommendation? Elaborate.
Use these three elements to structure your memo appropriately. Include the table of products and prices, and append it to your memo (i.e., the table comes after your memo). Include an additional page for reference materials consulted after the table. Examples of things you might reference include company websites, press releases, or retail store prices; any formatting style (e.g., APA, MLA, Chicago, etc) will be OK for this assignment, provided you are consistent and use a commonly accepted style. Not sure? Use APA.
As a form of business communication, use an appropriate format and style. For instance, limited use of headers, bullet points, and/or images can be highly effective & is encouraged. Consider your audience (the CMO) when crafting your memo. Go to the link under "Deliverables" for more information about creating a memo.